Understanding Returns and eBay’s Money Back Guarantee

Returns are part of selling on eBay whether sellers advertise that they accept them on a listing or not. eBay’s Money Back Guarantee (MBG) allows buyers to return an item if it is ‘not as described’ and also assists when an item is not received. eBay sellers should understand the limits of a return policy and the impact of the MBG on transactions.

Accepting vs. not accepting returns

Sellers have two main options when listing an item and choosing a return policy for that item. One is to not allow returns and the other is to accept returns for any reason at all. The first option is somewhat misleading as discussion of the Money Back Guarantee will prove later, but for the most part it means not allowing buyers to return an item because they didn’t like it for whatever reason (buyer’s remorse). Not allowing returns puts a seller as a competitive disadvantage but can stop most buyers attempting to return items for frivolous reasons.

Accepting returns has the major advantage of providing the buyer with confidence, making them more comfortable to purchase. This can lead to more sales and therefore more profit for a seller’s business. Most sellers will find that the take-up on the return policy is low. When it is used however, it can mean lost sales, time and effort for the seller. There is some customisation of the return policy available such as setting the time limit for buyers to request a return, deciding who will pay for the return shipping, what kind of refund and whether there is a re-stocking fee for the buyer to pay.

The Money Back Guarantee

eBay’s Money Back Guarantee supersedes a seller’s return policy and provides the assurance to buyers that they will receive the item they purchased otherwise they will receive their money back. It covers two main situations:

  • Item not received – The buyer reports that the item was not delivered after the latest estimated delivery date.
  • Item not as described – The buyer does not believe that the listing description matched the item they received.

In both instances, the seller first has the opportunity to resolve the situation with the buyer independently. If the buyer is not happy with the seller’s response (or lack thereof), they can elevate the issue and ask eBay for assistance.

Item not received

In the first situation, the situation can often be resolved in a straightforward manner with the seller providing the buyer with evidence that the item arrived on-time at the requested address. If the item was not successfully delivered (at no fault of the buyer) and the seller does not offer to refund the item, eBay will refund the buyer with item and original shipping costs. Reimbursement is then required by the seller. Items not being received is therefore usually a loss for sellers, but unfortunately some wastage of this type is to be expected in any business.

Note that this issue can be manipulated by unscrupulous buyers, who may request the item to be sent to a different address after they have purchased. This opens up the potential for a popular scam, enabled by the MBG.

Item not as described

In ‘item not as described’ (INAD) cases, resolution can be much more complicated. The problem with this type of complaint is that the idea of an item not being as described can be a matter of perspective. Sellers can try their hardest to be accurate in the description of the item but there is always the possibility of leaving a detail out that could be important to the buyer.

Alongside the legitimate requests, sellers may also experience dishonest buyers raising INAD cases to take advantage of eBay’s Money Back Guarantee. Both buyer and seller can present their case to eBay with photos as evidence, but always remember that eBay has the reputation of siding with buyers in the manner of ‘the customer is always right.’

If eBay requests the item to be returned to the seller, the shipping cost will be covered by the seller. If the seller does not create a shipping label, eBay will and then charge the seller later. Sometimes, eBay does not ask the buyer to send back the item but may still refund them the cost of the item and seek reimbursement from the seller. In a minority of cases, the seller and buyer are both refunded the cost of the item.

Deciding on a return policy

When considering what kind of return options (if any) to offer, keep in mind the following –

Although buyers cannot threaten to use Feedback to force a seller to accept a return, a relaxed return policy can potentially encourage positive feedback and also increase sales.

What is your experience of eBay returns? Please let us know using the comment form below.